Wednesday 21 September 2011 14.29 EDT
First published on Wednesday 21 September 2011 14.29 EDT

Ed Miliband will need to make the speech of his life at Labour's conference next week and, aside from the usual rousing overtures, show he understands, and is starting to address, three key strategic challenges that will define his tenure as leader.

The first is a revisionist journey even more fundamental than that of David Cameron's Conservatives, demonstrating he is willing to learn from 13 years in government. That requires a more nuanced and balanced assessment than Cameron needed to signal in relation to the Thatcher years.

Miliband's task is subtle: to display an understanding of what Labour in power did well and could build on – for instance devolution, child poverty and primary education. But he must own up to areas Labour got badly wrong, even if it wasn't apparent at the time. This is true of much of its political economy. Too weak in financial regulation, too bossy and statist in trying to pull levers at the centre, New Labour was never willing to develop genuine devolution in civil society and local government.

A sceptical and disillusioned public needs to know where Labour stands after the Blair and Brown years. Until it develops and owns a compelling narrative about the past, the party will struggle to get a hearing. Miliband can use his speech to start framing this account, melding past, present and future.

The second challenge is to step out of the role of Labour cheerleader, challenging his party's instincts where they threaten electoral recovery. Despite the worsening economic situation and growing scepticism towards government policies, Labour looks unlikely at present to benefit. It has failed to capitalise on the coalition's tensions and astonishing absence of a plausible growth strategy. There are few signs that Labour has reconnected with voters outside its heartlands. Its economic reputation has been badly dented by the coalition's simplistic but effective blaming of the last government for the current crisis. While the causes of the crises are complex, Labour needs to accept that it failed to regulate banks and allowed the economy to inflate into an unsustainable asset bubble.

Losing a reputation for economic competence could have devastating consequences for Labour among middle and working class voters. This can only be countered by a clear indication of where Labour stands on public spending cuts and a fuller account of its alternative growth strategy.

The third challenge is to put Labour at the head of a broad, cross-class, anti-Tory coalition. It may seem paradoxical with Lib Dems in government, but the smartest thing Miliband could do is to reach out to the widest range of liberal opinion at a point when many Lib Dems are wondering if it is wise to bet on George Osborne's remedies.

But Miliband needs to rekindle a relationship with liberalism while showing he recognises the declining position and real insecurities of working class communities. This means reassembling a broad progressive community that, despite differences, is united in its implacable opposition to key aspects of the coalition's programme. Only such an expansive vision – not tummy-tickling tribalist polemic – will signal Labour's return as a plausible contender.

He doesn't need to hug hoodies or ride with huskies to show he understands Labour's reputational problems. But he does need to make Labour fresh, interesting and economically credible again. This speech is one of few opportunities to choose what he talks to the public about, and in what tone. He should take his audience with him on a journey from past to future, learning from New Labour's legacy, to forge a vision of a different kind of progressive government for tomorrow.